There’s no question that the Canadian stock market has had a hot start to the year. The S&P/TSX Composite Index began its climb upward late last October. The index is currently up more than 5% on the year and 15% over the past six months.
But even with the market as hot as it is right now, there are still deals to be found on the TSX.
I’ve put together a well-diversified basket of five top stocks. Canadians can own the basket in its entirety for less than $500 today.
Air Canada
Canada’s largest airline continues to trade far below pre-pandemic levels. Shares of Air Canada (TSX: AC) are down 60% since the beginning of 2020.
The airline space isn’t known for its market-beating returns, but Air Canada is no stranger to outperforming the market. Volatility should be expected, but there’s a serious value play here for investors who are willing to be patient.
It could be a while before we see Air Canada trading at these prices again. Don’t miss your chance to load up.
Bank of Nova Scotia
It feels like there’s seldom a bad time to load up on a major Canadian bank. From dependability to passive income, there’s a spot for at least one Canadian bank in any long-term investor’s portfolio.
At today’s stock price, Bank of Nova Scotia’s (TSX: BNS) dividend yields above 6%. That ranks it as the highest amongst the Big Five.
In addition to a top dividend, Bank of Nova Scotia provides its shareholders with plenty of international exposure. In addition to its Canadian and U.S. operations, the bank has a major presence in South America.
With shares down close to 20% since the beginning of 2022, there is more than one reason to have this bank on your watch list right now.
Descartes Systems
It may fly under the radar more often than not, but this tech stock deserves some attention. The company owns an impressive track record of delivering market-beating returns and still has plenty of growth ahead of it.
Descartes Systems (TSX: DSG) has returned 130% over the past five years. In comparison, the Canadian market hasn’t returned much more than 30% over the same period, excluding dividends.
With shares trading at just about all-time highs, investors will need to pay up to own this tech stock. However, if you’re looking for market-beating returns, this is as sure of a bet as you’ll find on the TSX.
Brookfield Infrastructure Partners
If you plan on owning high-growth companies, investing in a dependable utility stock would be a wise idea.
Brookfield Infrastructure Partners (TSX: BIP.UN) is far from the most exciting stock around. But similar to the Canadian banks, the utility company can provide an investment portfolio with defensiveness and passive income.
The utility sector is second to none when it comes to enjoying low levels of volatility.
Northland Power
The last pick on my list is a beaten-down renewable energy stock. Like many others in the space, Northland Power (TSX: NPI) is currently trading at a massive discount.
Excluding dividends, shares are down more than 50% since the beginning of 2021. However, it’s worth noting that with the pullback in price, the yield has shot up to above 5%.
In the decade prior to 2021, Northland Power had a history of outperforming the market, in addition to paying a very respectable dividend.
If you’re bullish on the long-term rise in renewable energy consumption, now’s the time to invest.
